Morrison Company uses a job-order costing system to assign manufacturing costs to jobs.

Its balance sheet on January 1 is as follows: Morrison Company Balance Sheet January 1 Assets Cash $ 37,950 Raw materials $ 9,900 Work in process 8,350 Finished goods 31,800 50,050 Prepaid expenses 2,600 Property, plant, and equipment (net) 120,000 Total assets $ 210,600 Liabilities and Stockholders Equity Accounts payable $ 16,200 Retained earnings 194,400 Total liabilities and stockholders equity $ 210,600

During January the company completed the following transactions: Purchased raw materials on account, $80,400. Raw materials used in production, $86,600 ($70,600 was direct materials and $16,000 was indirect materials). Paid $210,950 of salaries and wages in cash ($113,600 was direct labor, $47,550 was indirect labor, and $49,800 was related to employees responsible for selling and administration). Various manufacturing overhead costs incurred (on account) to support production, $39,750. Depreciation recorded on property, plant, and equipment, $62,000 (70% related to manufacturing equipment and 30% related to assets that support selling and administration). Various selling expenses paid in cash, $39,800. Prepaid insurance expired during the month, $1,600 (80% related to production, and 20% related to selling and administration). Manufacturing overhead applied to production, $146,000. Cost of goods manufactured, $303,400. Cash sales to customers, $415,440. Cost of goods sold (unadjusted), $299,600. Cash payments to creditors, $73,000. Underapplied or overapplied overhead $? .

Required: 1. Calculate the ending balances that would be reported on the company's balance sheet on January 31. (Hint: Be sure to calculate the underapplied or overapplied overhead and then account for its affect on the balance sheet.) 2. What is Morrison Companys net operating income for the month of January?